On December 19, 1939, the KV-1 Heavy Tank was accepted for the service. At that time, the KV-1 took part in combat tests on the Russian-Finnish War (the Winter War). During those battles, the Soviet High Command come to the conclusion that a heavy tank with more powerful armament was highly needed to combat enemy's bunkers, pillboxes and other fortifications.

The North-Western Front HQ ordered first four KV-1 tanks from the experimental party to be armed with 152 mm howitzers. To do this, the best engineers from KTZ's design bureau were summoned and after two weeks a new project was completed. In a first attempt engineers decided to use the 152 mm mod.1909/1930 howitzer, but later it was replaced with more modern 152 mm M-10 Howitzer Model 1938/1940. A new, bigger turret was designed to accept such heavy cannon. That turret was named "MT-1".

At the beginning of 1941, this tank was renamed KV-2. Before this, the KV-1 was called "Tank With a Small Turret" and the KV-2 was designated as "Tank with a Big Turret". The MT-1 turret was placed on the chassis of a KV-1 tank since the turret ring diameter was identical to the smaller turrets on KV existing hulls. The first three vehicles of the new type were ready by January 1940. On February 10 1940 the first trials were conducted with prototypes U-0 and U-1 at the proving grounds of the Kirov Works in Leningrad. At the time, Soviet tank designers weren't very experienced in vehicles of such a heavy weight. A small lid on prototype U-3 howitzer's barrel was added. That lid was intended to preserve the gun from the dust, shell's fragments and bullets. However, after the first shot this lid was torn away and it was never used.

Immediately after factory tests, prototypes U-0, U-1, U-2 and U-3 were sent to the battlefront on the Karelian isthmus, while prototype U-4 didn't reach the frontline in time before hostilities ended in the north. In spite of some rumors, KV-2s didn't take part in battles before the Great Patriotic War. The KV-2 prototypes fired on already captured pillboxes. The results of those tests were excellent and later, in November 1940, the KV-2 Heavy Tank was ordered into production. Before production was actually launched, the MT-1 turret was completely modernised in August 1940 and tested in its new MT-2 configuration on hull U-7 in September 1940. Despite the small number of pre-series (U) vehicles completed (presumably from U-0 to U-7), the KV-2 Model 1939 was used against the Germans possibly exclusively with the 20th Heavy Tank Brigade. According to all existing sources all the U-series vehicles were lost in action within a few weeks after the hostilities had begun.

The first KV-2s Model 1940 began to leave the factory in November 1940. This model differed in many details from the pre-series vehicles. The MT-2 turret now used was lower and lighter and had a new and easier to build cast mantlet and a revised turret rear hatch. A ball mount for a new bow DT machine-gun was fitted and also a co-axial machine-gun to replace the pistol ports for close defence of the pre-series vehicles. The location of stowage boxes on the trackguards was also altered. The turret could be traversed electrically or mechanically by 360º but this took 36 seconds for a full turn. Accurate firing of the howitzer was only possible on the halt and on nearly even ground. The design of the 10-ton turret consisted of a mixture of welded armour plates and cast components. The engine fitted was the V-2 in its especialised variant V-2K when used in the KV.

The shortened M-10 howitzer was able to fire a 52-kg high-explosive projectile with a muzzle velocity of 436 m/s. Only high-explosive shells with reduced propellant charge were used for KV-2's gun. No armor-piercing and concrete-piercing ammo were used. It allowed to use Naval Semi-AP Round Model 1915/28. However this ammo, used only in Red Navy ships, was absent in the Red Army's warehouses. Despite some modern sources, the usage of armor-piercing and concrete-piercing ammunition was prohibited; it was highlighted in the KV-2's Operational Manual. The problem was its big recoil; it definitely jammed KV's turret. Until the middle of 1941 Soviet engineers tried to develop a special concrete-piercing projectile for KV-2, but they were unsuccessful.

The KV-2 had 36 rounds for its main gun and 3,087 rounds for its bow and rear machine-guns. The crew comprised six members: tank commander, gun commander, second gun commander (loader), gunner, driver, and radio operator.

Besides the 152-mm howitzer, there were some other guns which were either tested or intended to be mounted on the KV-2. One of them was an attempt to mount a long barreled 106.7 mm Gun ZIS-6 (initially, this gun was proposed for the perspective KV-3 and KV-5 tanks). From May to June 1941, the KV-2 with the ZIS-6 was tested on factory's trials which it failed. The main problem was with gun's ammunition: the gun had single-loading rounds. Such a long and heavy shells were very hard to handle and operate by a single loader. Additionaly, the KV-2 was armed with the 85 mm Gun F-39 but the results of those tests are unknown.

Unfortunately, the new tank had same defects in transmission and chassis as the KV-1. Besides, most KV-2 tanks didn't have a proper number of ammunition. Nevertheless, the appearance of KV-2 became a shock for German tankers. There wasn't any weapon, with the exception of the 88 mm AA-Gun, that could successfully defeat this beast.

In November and December 1940 a total of 104 tanks were produced in the Kirov Works in Leningrad. By June 1941 the Red Army listed a total of 134 tanks. In October 1941 the factory had to be evacuated to Chelyabinsk and KV-2 production was halted in favour of more modern types.

In the first months of war with Germany, the KV-2s weren't successful on the battleground. According to the war diary of 11th Panzer Regiment, which operated in the 6th Panzer Division in the North Front, on 25 June 1941 the Russians lost most of their KV-2s because of breakdowns. For example, 41st Tank Division lost 22 KV-2 tanks of 33 tanks. Only 5 tanks were destroyed by the Germans, other 17 tanks were abandoned because of breakdowns or run out of fuel.
The vehicles captured by the Germans were designated Pz.Kpfwg. 754(r). Modifications included a new commander's cupola and a rear ammunition rack.